Mike James
The Independent
COALTON Laid —
Laid off? Don’t panic.
That’s the first piece of advice from a financial expert who was in northeast Kentucky Friday for a conference.
Instead, channel energy into developing a plan for making it through lean financial times, said Jennifer Hunter, an Ashland native and an assistant professor in the department of family studies at the University of Kentucky.
The plan should include income and expenses in detail, severance package information, unemployment eligibility — as much information as it will take to determine how much money is coming in and how long it will last, said Hunter, who also is a state extension agent for family financial management.
Hunter was at EastPark to meet with Ashland Community and Technical College staff during their annual learning conference, but said her suggestions would be appropriate for anyone — such as the scores of King’s Daughters Medical Center workers laid off Thursday — facing loss of a job.
The key to making the plan work is putting it in writing, Hunter said. Doing so shows expenses that are fixed, such as house payments and utilities, and expenses that can be trimmed, like groceries, clothing and entertainment.
Besides clarifying avenues for saving, a written plan makes the financial situation more tangible. “When you just talk about it, it doesn’t seem as real,” she said.
Whether laid off or just trying to cope with lean financial times, Americans are finding they have to come to terms with what Hunter calls “the new financial normal.”
In other words, having enjoyed the fruits of a healthy economy during with they developed spending habits based on having plenty of money, they are now living in a protracted recession and are having to develop new habits.
Hunter’s suggestion, both to negotiate the remaining time in recession and for a healthy financial future: assess values and goals and use those to guide spending.
Also helpful, setting financial goals and developing plans to achieve them. Hunter’s example: planning a vacation that will cost $2,000 and then looking for ways to save that much. If cutting out restaurant lunches saves $5 per day, that’s $100 per month.
Keeping a written record of the skipped lunches and the amounts saved is an effective motivational tool. “If you can see the progress you are much more likely to continue the behavior,” she said.
Minimizing interest payments is another effective way to maximize savings — a $2,000 purchase bought on credit with an 18.5 percent rate and paid off with minimum monthly payments will add another $2,000 to the final bill.
Saving some money,even a little bit, each month is important. Small savings add up, and help develop the habit of saving. Savings should be taken out at the beginning of the month along with the other bills rather than waiting to see how much is left over at the end of the month.
When possible, have savings automatically deposited — the more automatic the process, the easier it is to keep saving.
MIKE JAMES can be reached at mjames@dailyindependent.com or
(606) 326-2652.
